How Does Medicare Plan N Work?

Although Medicare can provide comprehensive coverage for a wide range of medical services, it can surprise people that Part B only covers 80% of the costs. The remaining 20% is your responsibility, which can be pretty expensive depending on your medical treatment.

Fortunately, Medicare Supplement plans can help cover this 20% for you. Out of the ten different Supplement plans available, Plan N is among the most popular. So, how does Medicare Plan N work?

About Medicare Supplement Plans

Medicare Supplement plans, also called Medigap plans, help cover your portion of Medicare costs, including coinsurance, copayments, and deductibles. When you have Original Medicare (Part A and Part B) and a Medigap plan, your out-of-pocket costs are more predictable.

Private insurance carriers offer these plans and work secondary to Medicare, making Medicare your primary insurance. This means that Medicare pays first for medical services, and your Medigap plan will pay second. So, if Medicare does not pay for a service, your Medigap plan won’t either.

One of the great things about having a Medigap plan is that it can be used anywhere in the U.S. as long as the provider accepts Medicare insurance, so you don’t have to worry about provider networks.

About Medigap Plan N

Medicare beneficiaries’ top three Medigap plans are Plan F, G, and N. However, Plan N can be more cost-effective as it tends to have lower monthly premiums. So, if you’re looking for a slightly cheaper Medigap plan than G or F, Plan N may be a good fit for you as outlined here at Boomer Benefits – Plan N.

Because Plan N can have lower monthly premiums, you do have the chance for more out-of-pocket costs, including the Part B annual deductible, Part B excess charges, and extra copayments.

Medicare Part B Deductible

Both Plan G and Plan N do not cover the Part B deductible, so there’s not a huge difference here with the deductible. In 2022, the Part B deductible is $233, but it will decrease to $226 in 2023.

Well, how does the Part B deductible work with Plan N? For Plan N’s benefits to kick in, you must first meet the Part B deductible. Once you meet the deductible, you should have no out-of-pocket for approved services unless Part B excess charges apply.

Medicare Part B Excess Charges

Part B excess charges are applied when a provider does not participate in Medicare and therefore does not accept Medicare assignment. Medicare assignment refers to Medicare’s allowable rate for a medical service. So, if a provider does not accept Medicare assignment, they can charge you up to 15% more than Medicare’s approved rate for a service. These extra charges are known as Part B excess charges.

Fortunately, excess charges are not too common and can easily be avoided. To avoid these extra charges, you will need to verify with a provider whether they accept Medicare assignment or not. You should be able to call a doctor’s office directly for more information.

Additional Copayments

In addition to the Part B deductible and excess charges, you can also have extra copayments for doctor’s appointments and emergency room visits. For doctor’s visits, the copayment can be up to $20, while an emergency room copayment can be up to $50.

Plan N vs. Plan G vs. Plan F

You may wonder if you should go with Plan N or another top Medigap plan like G or F. Well, Plan F is the most comprehensive plan as you have no out-of-pocket costs for approved services. However, Plan F is only available to those eligible for Medicare before January 1, 2020. If you were eligible for Medicare on or after this date, you cannot enroll in Plan F. Plan F also has higher monthly premiums, so it may not be the most budget-friendly option.

Most people debate choosing between Plan G and Plan N. The only difference between these two plans is that Plan N does not cover Part B excess charges, and you can have extra copays for doctors and ER visits. Other than that, there is no difference other than monthly premiums.

Plan G usually has higher monthly premiums. However, the exact cost you pay for a Medigap plan depends on different factors, including your zip code, age, gender, tobacco use, and more.

Final Thoughts

Plan N is a good option for many people. To help you decide if Plan N is a good fit, consider how often you visit the doctor and if you’re okay with some extra out-of-pocket costs if it comes to that. Also, remember that it can be challenging to switch Medigap plans in the future, so be sure to do your research now and choose what you think is suitable for the long term.

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